Kenya: Lax Transport Rules Plunging Cane Farmers Into Losses

26 February 2020

Lack of regulation in the transportation of sugarcane to factories has led to exploitation of farmers as service providers arbitrarily set varied rates across different zones.

This, according to the sugar task force report, indicates that lack of clear guidelines has left farmers suffering from accumulated cost of credit.

"Farmers' returns are eroded by high transport costs as these are pegged on distance from the factory," said the report in part.

In addition, the process of determining transport charges does not involve farmers most of the time.

OVERLOADING

To ensure that they maximise returns while optimising on costs, farmers tend to overload trucks which leads to further losses through spillage of the commodity.

"According to a recent study, high transport costs and transit losses lead to a significant amount of cane spilled in the transportation process," said part of the 160-page document.

Most of the haulage trailers are open sided, presenting opportunities for predators to take advantage of cane spillage.

To reverse this, the team recommended development of a code of conduct that specifies industry standards for cane transportation.

The team also called for the establishment of a cane pricing committee to consider all charges recoverable from the farmer.

PENALISE MILLERS

The report called for strict enforcement of farmer/miller contracts that require growers be paid within seven days, failing which the miller is penalised.

The proposal is meant to reverse the current situation where some of the millers do not meet their contractual obligations to pay farmers for cane deliveries as stipulated.

"This delay translates to lost opportunity and financial losses attributed to time, value of money, cumulative cost of credit and forces farmers to dispose of cane to other millers below cost," said the report.

If millers fail to meet their side of the bargain, the report provides for an exit clause upon breach of contract.

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